By Robert Taylor
Boerne City Council heard from staff at the June 25 meeting on where the City stands in the budget cycle and the outlook for the upcoming fiscal year 2025 budget which begins in the fall.
City Manager Ben Thatcher explained the budget cycle runs the full calendar year as staff are constantly planning and preparing for the next budget. The City is currently in the operationalizing phase, which calls for a focused review of departmental budget plans, the City’s operating and capital budget, and the annual work plans/project management.
The City of Boerne bases its strategic budgeting process on citizen input received through citizen surveys conducted every two years and feedback gathered during master plan development.
Budget Priorities
Finance Director Sarah Buckelew presented the budget guiding principles and detailed the budget priorities for FY 2025, which include:
- Manage Inflationary Cost Increases
- Maintain Employer of Choice Status
- Master Plan Implementation
- 2022 Quality of Life Bond Projects
- Capital Improvement Project Advancement
- Tax Relief
Inflation and Interest Rates
Looking ahead to the FY 2025, Buckelew said the department expects inflation to continue to slow from its peak in 2022 along with an anticipated decrease in interest rates.
Employer of Choice
To meet the budget priority of maintaining the employer of choice status, Buckelew said the City will continue to base its cost of living adjustment on statistics from the Bureau of Labor, specifically the Employee Cost Index.
As of March, the ECI, which considers anticipated increases in wages and benefits, is at 4.8%. Staff will wait until the final ECI numbers are released at the end of June to provide a more solid outlook. Buckelew said the City is projecting its benefits costs to fall short of the national average.
Sales Tax
Sales tax revenue continues to grow at a healthy rate for the City despite economic downturns thanks to a stable local economy. Citywide events like Dickens on Main continue to be a major driver for sales tax. Unlike the current fiscal year, next year won’t see the sales tax benefit of two solar eclipses. That said, sales tax is projected to increase by 5-6% for FY 2025.
Property Tax and Tax Rates
Buckelew shared a brief overview of the anticipated property tax outlook. Based on preliminary rolls from the Kendall County Appraisal District, home values are expected to increase by 10%, which does not equate to the same increase in property taxes for the City. Final numbers will be provided by KCAD by July 25.
In the prior year fiscal year 2024 budget, the City was able to maintain a steady tax rate while advancing $18 million of the voter-approved bond. This was done by prioritizing a decrease in the maintenance and operations portion of the budget. A goal for the FY 2025 budget is to further reduce the maintenance and operations portion and provide tax relief to residents.
Upcoming Budget Calendar
In the coming weeks, the City Manager’s Office will continue to review supplemental budget requests from departments and work with staff to prioritize budget needs.
Below are key dates in the budget development process:
- July 9: City Council Meeting | Capital Improvement Projects Workshop and a presentation from the Kendall County Appraisal District
- July 23: City Council Meeting | Utilities Board Workshop
- August 9: City Manager files proposed budget with City Secretary, draft budget provided to City Council
- August 13: City Council Meeting | Governmental Budget Workshop
- August 27: First public hearing on budget and tax rate
- September 10: Second public hearing on budget and tax rate and adoption of budget and tax rate
Watch the full budget presentation to council online.
